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U.S. Department of Interior says it intends to pay energy royalties

Colorado congressmen seek legislation to protect payments

By Bruce Finley The Denver Post

Posted:
08/27/2013 11:23:57 PM MDT

Updated:
08/27/2013 11:24:26 PM MDT

Department of Interior officials said Tuesday they won't withhold oil and gas royalty payments next year from 34 states, including Colorado, as part of the federal budget sequestration and will pay back funds captured in 2013.

Colorado is owed $5.7 million as of July, Attorney General John Suthers said in a prepared statement.

Three weeks ago, Suthers and nine other state attorneys wrote to the administration demanding that mineral royalties be paid to states. They argued royalties are not a gift, handout or entitlement but instead are the result of a 1920 compromise compensating states for mining within their boundaries.

Interior officials said the amount of money returned may change, but the agency will work quickly to disburse funds held back in 2013.

Royalties are collected from companies extracting oil, gas and minerals from under federal lands. States use the money to fund schools, roads and infrastructure projects.

Republican U.S. Reps. Scott Tipton and Cory Gardner, who represent oil-rich parts of Colorado, said in a joint statement that a legislative fix is needed to protect royalty payments in the future. They joined Western Caucus colleagues in offering legislation earlier this year that would allow states to collect royalties directly from producers, instead of using the federal government as a middleman.

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"These revenues should not be held up by dysfunction at the federal level," Gardner said in the statement.

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